“The import of iron ore has increased from 0.37 million tonnes (MT) in year 2013-14 to 5.63 MT in the year 2014-15 (April-November),” Minister of State for Steel and Mines Vishnu Deo Sai said in a reply to the Lok Sabha.

The minister further said there is no acute shortage of raw material like iron ore. However, there are regional shortages of iron ore due to Supreme Court’s decisions regarding lease renewal in Goa and Odisha and cancellation of mining leases in Karnataka.

“Coking coal which is used in steel making is largely imported into India due to its non-availability,” the minister said.

Iron ore imports in 2012-13 were at 3.05 MT while the previous 2011-12 year imports were 0.97 MT, the minister said.

He further said that as per the report of the Working Group on Steel for the 12th Five Year Plan for 2016-17, the iron ore requirement is 206.2 MT for crude steel production capacity of 125.9 MT.

At present 21% of crude steel production is being done by public sector and 79% of crude steel production is being done by private sector.

Source: Business Standard

]]>http://www.shippingtribune.com/india-iron-ore-imports-jump-multi-fold-to-5-63-mt-in-apr-nov-fy15/feed/0Excess fleet holding dry bulk freight rates at historic lowhttp://www.shippingtribune.com/excess-fleet-holding-dry-bulk-freight-rates-at-historic-low/
http://www.shippingtribune.com/excess-fleet-holding-dry-bulk-freight-rates-at-historic-low/#commentsTue, 03 Mar 2015 03:31:33 +0000http://www.shippingtribune.com/?p=49387Continue reading →]]>Nothing will describe the pathetic state of the global dry bulk shipping industry more tellingly than three shippers filing for bankruptcy last month. Freight rates staying for long in deficit of ship operating expenses for most vessel owners first claimed a victim of privately owned Danish group Copenship and then China’s Winland Ocean Shipping, which filed for bankruptcy protection in the US under Chapter 11.

Filing with a US federal bankruptcy court under the chapter for protection allows a debtor to reorganise the business. South Korea’s Daebo International Shipping has also filed for debt rehabilitation. The Baltic Dry Index, an aggregate of indices for Capesize, Panamax and Supramax size vessels for tracking dry bulk shipping and trading costs, is staying at an all-time low, despite recent improvements in freight rates.

Whatever rates improvement is happening is, however, solely due to rises in bunker prices. Supply of dry bulk tonnage remains much in excess of demand, as world trade growth has remained well below the two-decadal average of 5.3 per cent. Even after providing for routine New Year-related distortions in foreign trade data for January and February, when the Chinese economy virtually takes a two-week break, nearly 20 per cent fall in imports in January by the world’s second largest economy did not bode well for the shipping industry.

The super size Capesize and Panamax vessels took a hit last year, as the amount of coal burnt in China fell for the first time this century, leading to lesser coal import. The 2014 fall in coal use, caused by increasingly greater reliance on electricity generated by hydel and other renewable sources, contrasts with a 5 to 10 per cent annual fossil fuel use growth rate for most of a century. Less burning of coal by China is good for the environment. But that leaves dry bulk shipping capacity idle. A rise in Indian coal imports could only partly compensate for shrinkage in Chinese imports. No wonder, so many more Capesizes and Panamaxes are employed to ship ore from Brazil and Australia to China, which taking advantage of a nearly 50 per cent collapse in ore prices and low freight lifted imports of steel making ingredient by 112.2 million tonnes (mt) to 932.5 mt. China’s January steel production fall by 4.7 per cent to 65.5 mt on a year-on-year basis and remains a concern for ore exporters. But January is seen as a ‘silly month’ for the Chinese business, setting no trend for the rest of the year.

Hasn’t China Iron and Steel Association said the country’s ore imports will climb to a record one billion tonnes this year, with Australia and Brazil, claiming a share of 80 per cent? Ore inventories in Chinese ports have been used up to a point which should give a push to import. This will bring some relief to shipping lines. “Capacity overhang in the dry bulk segment is so deep that freight rates will continue to remain under pressure for at least next couple of years,” according to Peter Cremers, chief executive officer of ship management major Anglo-Eastern Group. Weather-beaten shipowners have finally made a spirited beginning in cutting over-capacity. They are consigning vessels to scrapyards at one of the busiest paces in recent decades. Demolition activity is most pronounced in the dry bulk segment of the industry. In January, the number of Capsizes sold for scrapping nearly totalled the number decommissioned in the whole of 2014. Even then, it will not be too soon before demand catches up with shipping tonnage.

A year ahead of the 2008 global financial crisis, investment in shipbuilding was a staggering $226 billion. Since the crisis triggered by Lehman Brothers filing for bankruptcy happened in September, orders for new ships claimed another large investment of $178 billion in 2008. Then, battered by a collapse in the commodities market and freight rates, investment in new ships in 2009 fell drastically to $44 billion. Clarksons Research informs that since then, investment in the range of $91 billion and $131 billion was made annually. But banks are not any longer comfortable in financing new ship construction. This explains why some contracted dry projects are being swapped to wet ones, meaning postponement in new ship deliveries. Abundance of capacity has translated into world cargo fleet productivity declining from a peak of 9.1 tonnes of cargo per deadweight tonnage (DWT) in 2004 to 6.5 tonnes per DWT in 2014. The productivity fall is due to global seaborne trade growing by 44 per cent during this period in the face of a 102 per cent fleet capacity expansion.

Source: Business Standard

]]>http://www.shippingtribune.com/excess-fleet-holding-dry-bulk-freight-rates-at-historic-low/feed/0Supertankers Speed Up As Crude Oil Prices Fallhttp://www.shippingtribune.com/supertankers-speed-up-as-crude-oil-prices-fall/
http://www.shippingtribune.com/supertankers-speed-up-as-crude-oil-prices-fall/#commentsTue, 03 Mar 2015 03:28:32 +0000http://www.shippingtribune.com/?p=49385Continue reading →]]>One of the stranger pieces of news that came over the wire last week, was the fact that the world’s Ocean going supertankers are sailing at the fastest speeds in 2.2 yrs as a collapse in Crude Oil prices spurs demand for cargoes and drives up daily returns owners can make from deliveries.

Very large Crude Oil carriers, each about 1,000-ft long and able to transport 2-M bbl of Crude Oil, sailed at an average of 12.57 knots this month, according to data from RS Platou Economic Research, an Oslo-based firm. The fleet, whose steel weight is about 27-M tonnes, last moved that fast in August 2012.

Equally of interest is that tanker rates have grown on signals that China accelerated purchases of Crude Oil to fill its stockpiles with cheap Crude Oil after Brent Crude, the global benchmark, collapsed last year.

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These massive ships earned an average of more than $71,000 a day since the start of January, the best start to a year in Baltic Exchange data that begin in mid-2008.

“Freight rates are high because there’s a lot of oil trade at the moment,” Frode Moerkedal, an Oslo-based analyst at Platou Markets, an investment adviser linked to the research company, stated recntley. “OPEC has refused to cut production so there’s more Oil being shipped.”

VLCC speeds from 14-to-16 Feb. were 6.7% higher than 14-to-16 November., according to Platou.

The speed for the ships when voyaging without cargoes rose 10% over the same period to 13.31 knots. The daily average rate to hire a VLCC on the benchmark Middle East-to-East Asia route was $71,772 so far in Q-1, compared with an average of $47,614 in Q-4 of Y 2014, according to Baltic Exchange data.

Falling Crude Oil prices encouraged shipment volumes: VesselsValue Ltd., a London-based firm that provides shipping data, also estimates VLCCs are sailing at the fastest since Y 2012. The acceleration is in part because falling oil prices have cut bunker fuel costs, which these ship use to power their engines, which has made it more profitable for owners to transport cargoes in as short a time as possible.

So, here is a stock sector of the market that has been depressed lately, and an industry which is now seeing lower operating costs from fuel savings, similar to the airline industry which has performed very well the past few months. And its an industry that IS also enjoying higher rental rates.

The Big Q: Can a significant uptrend in theses stocks be far off?

Larger Vessels, Mergers Dominate: There’s also consolidation accruing in the industry as noted by Knightsbridge Shipping Limited (NasdaqGS:VLCCF ) which has announced the date of its Special General Meeting of Shareholders to approve the previously announced merger with Golden Ocean Group Limited.

Looking ahead, MIDF Investment Research expects that the Baltic Dirty Tanker Index will trend higher due to continued weakness in Crude Oil prices. This encourages seaborne trade activity. Also, a colder-than-expected winter season in the Northern Hemisphere could create a situation similar to the end of Ys 2013 and early 2014 when the index soared to record highs. And the US reached a breakthrough in legislature. It allowed the export of Crude Oil for the 1st time in almost 40 yrs.

The Guggenheim Shipping exchange-traded fund (NYSEArca:SEA) can also be used to help investors keep track of the shipping industry dynamics and is a tracker of shipping companies. And option trading is available for this ETF.

Source: Live Trading News

]]>http://www.shippingtribune.com/supertankers-speed-up-as-crude-oil-prices-fall/feed/0Oil market will weaken once supporting factors fade: Barclayshttp://www.shippingtribune.com/oil-market-will-weaken-once-supporting-factors-fade-barclays/
http://www.shippingtribune.com/oil-market-will-weaken-once-supporting-factors-fade-barclays/#commentsTue, 03 Mar 2015 03:26:14 +0000http://www.shippingtribune.com/?p=49383Continue reading →]]>Oil market is set to weaken further when the factors that support the prices fade, according to Barclays. The fundamental oversupply in the market will weigh in once these factors ease, Barclays added.

As per a Barclays report, Oil markets are currently being supported by a few transient fundamental factors and shades of confidence. “We think the recent price action in crude oil is comparable, in terms of the fragility of the factors driving it as well as the confidence appearing in the market that the tide is turning.”

“While we expect Brent prices to recover eventually, with our 2016 forecast at 60/bbl, we do not expect a V shaped recovery from here,” Barclays added.

Prices will have to move lower first, to create a meaningful impact on supply reductions, before the market balances in the first half of the year.

“Within context of our expectation for sideways consolidation over the medium term, short-term risk is for a move towards the year-to-date lows

Erosion of nearby supports, such as the close below 50.85, the 21-day average, and subsequent break below the 48.20 range lows, confirm short-term downside bias helped further by the swing from bullish to bearish in daily momentum studies.

Barclays expect buyers to re-emerge near the 43.58 year-to-date lows. An unexpected break below 43.58 would force us to expect a deeper squeeze lower towards targets near 40. For now, though, oscillation around 50 is our base case scenario for the coming months.

Source: Barclays

]]>http://www.shippingtribune.com/oil-market-will-weaken-once-supporting-factors-fade-barclays/feed/0Port productivity not improving to meet demands of mega shipshttp://www.shippingtribune.com/port-productivity-not-improving-to-meet-demands-of-mega-ships/
http://www.shippingtribune.com/port-productivity-not-improving-to-meet-demands-of-mega-ships/#commentsTue, 03 Mar 2015 03:24:10 +0000http://www.shippingtribune.com/?p=49381Continue reading →]]>MAERSK Line CEO Soren Skou says there has been too little progress in reducing the time a ship is worked and back to sea, reports Newark’s Journal of Commerce.

Speaking after Maersk’s annual report, Mr Skou said: “We continue to build ships that are bigger and bigger and if we can’t get the containers off faster the whole thing will come to a grinding halt.

“Since 2007 the ship size in the Asia-Europe trade has effectively doubled. We used to have the 6,500-TEU ship being the workhouse, now it’s the 13,000 TEU ship. Our point is simply that port productivity has not doubled since then.

“While there has been improvement in productivity, we are spending more time in port because of bigger ships.”

Maersk pointed out in its financial report that: “Since 2007, the time spent in port by our vessels has increased significantly.

“Port and terminal productivity has not been able to follow suit with the increase in vessel size. On an Asia-Europe round-trip the time spent in port (one vessel on average) has increased from 12 days (2007) to 18 days.”

Mr Skou said productivity improvements boils down to crane productivity, that is, the number of lifts performed by one crane per hour.

The other measure is total number of moves per hour while a ship is in port, which considers both the pace at which individual cranes operate as well as the total number of cranes assigned to work a ship, as well as how well the carrier and terminal cooperate.

When it comes to individual crane productivity, Mr Skou said: “The industry is stuck at 25 to 30 moves per crane, per hour. We haven’t had any breakthrough development that can get that to 40 to 50 moves per hour.

“What I always ask terminal operators is, ‘what are they doing to make a leap frogging move in productivity?’ The crane productivity hasn’t really improved for many years, at least from what we can see in our numbers.”

JOC Port Productivity data collected from major container lines supports the idea that the numbers aren’t improving. For ships of 10,000 TEU and above, total moves per hour globally dropped from 114 to 111 from 2013 to 2014, according to preliminary 2014 data.

MOL also concluded an MOU for long-term chartering of two 20,000 TEU containerships with Shoei Kisen Kaisha, Ltd. The two containerships will be built at Imabari Shipbuilding Co., Ltd. The six vessels will be launched and delivered in 2017, and will serve the Asia-Europe service.

The 20,000 TEU type is the world’s largest among delivered and on order containerships. The newbuilding vessels will adopt various highly advanced energy-saving technologies, which will further reduce fuel consumption and cost, in comparison with 14,000 TEU types that MOL currently operates. The main engines have the specifications which enable LNG use as fuel in the future remodeling.

Commenting on the Group’s year end performance, Bruce Rann, Group CEO, said “We took a series of strategic actions to streamline our business model and focused on our core strengths of offshore, marine supply and logistics capabilities. The benefit of these actions has translated into a 41% increase in net earnings for FY2014, even as market conditions weakened in the later part of the year. This demonstrates the effectiveness of the long-term vision and strategy of the management.”

With a network of 13 locations in Singapore, Australia, China and recently added Thailand, serving well over 100 Asia Pacific ports, Sinwa has continued to grow its market share in the supply of a wide range of equipment and provisions to the marine and offshore industry, as well as providing a full and comprehensive range of shipping agency, logistics, warehousing and related support services.

Looking to the future, Bruce Rann added; “The over-capacity in the shipping industry and weak demand has depressed freight rates, and the shipping market may not improve in the short term. Also, as a number of offshore projects move from construction to production phase in Australia, and clients become increasingly prudent on their expenditures as oil prices stay low, the offshore business will not be immune from the market downturn either. We will continue to focus on and grow our core marine, offshore supply and logistics business and actively explore further growth opportunities throughout the Asia Pacific region.”